Lord v. Yonkers Fuel Gas Co.

Headnote

The “franchises, privileges, rights and liberties," which under the act of 1878 (Chap. 163, Laws of 1878); a manufacturing corporation is authorized to mortgage, to secure the payment of a debt, upon consent of the requisite number of stockholders, and which are not included in a consent to mortgage the real and personal estate of the corporation, are the corporate rights and franchises which became vested in the company by virtue of its organization as a corporation. Those terms do not include patent rights, licenses, easements, or privileges acquired by the company after its incorporation, either from individuals or other corporations ; these are in the nature-of property, and are, therefore, included in a consent to mortgage the corporate property.

This was a motion to correct the remittitur herein.

The case is reported, 99 N. Y. 548 . It was there held that a mortgage executed upon consent of stockholders to mortgage the real and personal estate of a manufacturing corporation, so far as it purported to include the franchises, privileges, rights or liberties of the corporation, was invalid and inoperative, and these were directed to be excluded from sale on foreclosure of the mortgage.

The following is the mem. of opinion on the motion :

“ ‘ The franchises, privileges, rights and liberties, ’ directed to be excluded from the sale are those referred to in chapter 163 of the Laws of 1878, which we understand to be the corporate franchises and rights which became vested in the company by virtue of its organization as a corporation under the general law. We do not understand that these include patent rights, licenses, easements or privileges acquired by the company since its incorporation, either from individuals or corporations; these are in the nature of property of which the company had the power to dispose, and it was not the intention of the court to direct that they be excluded from the sale. The remittitur follows the language of the act of 1878, and we do not think that it needs amendment. These views are sustained by the following cases cited by the respondent. (Bridgeport v. N.

Y. & N. H. R. R. Co., 36 Conn. 255 ; Chicago R. R. Co. v. People, 73 Ill. 511 ; Morgan v. Louisiana, 3 Otto, 223.) The motion should be denied, without costs.”